The Opinion of Solar23 GmbH Concerning
KfW Funded Projects in Africa
Jürgen Raach
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Current-state
In the last 15 years no German company has won a KfW financed auction in the field of solar technology. The reason KfW gives, that no German company is offering these services, is false. In the photovoltaic auctions in Morocco and South Africa, several German companies were represented in corporate groups.
In Spanish and French bilateral funded aid-development projects in the field of solar technology, in the last 15 years, no German company has gained an auction.
Criticism
- The project volumes of KfW projects are typically between 10 and 30 million Euro, which will be awarded only to large corporations.
- The majority of the German and African solar companies are medium-sized companies. The small and medium-sized businesses create most jobs and get involved locally in Africa, with production units and a service structure. These companies contribute actively to the economic development of Africa.
- The activities financed under the EZ solar projects are not sustainable and do not follow any development policies. They include outcomes such as for example, the number of electrified households, but not the sustainability of the project in matters of number of jobs that will be created on the spot or the fact that a national industry is built. Major companies import most components.
- In the South African auction, the French energy trust, EDF won over 50,000 SHS. This is where the German taxpayers' money is, in the highly subsidized French nuclear industry.
- The auction is won by the cheapest provider. Often, large corporations use their own subventions in order to win projects. In South Africa, the country where EDF will probably deliver the next nuclear power plants, they can use money from the "industrial partnership program" which EDF took the commitment to re-invest in South Africa.
- The natural growth of the markets of the African countries stagnated and the markets are collapsing, since the prices for solar systems in large-scale projects are not according to market prices. Private customers are waiting for subsidized solar systems. These are typical errors from the development policy of the 70s.
- By awarding the funded projects to a major group like, for example, in Morocco (16,000 SHS), or South Africa (50,000 SHS), the local market is monopolized in a short term and the natural local competitors lose their means of existence.
- The KfW does not act neutral in the awarding of tenders through local ministries or local authorities. The ONE and KfW were invited to Morocco by the local solar industry association (AMISOL) to split the tender to several companies. This did not happen
- In South Africa, KfW, on the recommendation of the DME, has split the 50.000SHS tender to two suppliers.
Conclusions
- Despite numerous direct talks with the BMZ and KfW, the two institutions do not see the need to admit mistakes and change the existing practice and to finally give priority to the medium-sized African and German companies.
Our demands
- Solar23 demands the German Development Cooperation to carry out no more solar technology projects in Africa.
- Solar23 demands KfW to withdraw from the financial cooperation in solar technology for Africa.
- KfW is in FC in competition with African companies and the German medium-sized businesses. Solar23 demands for an immediate halt of the FZ solar energy projects.
Solar23 is represented in 18 countries in Africa and concentrates its activities exclusively on the private sector. Solar23 demands less government and less development-support, because only private companies can support the economic recovery in Africa and release Africa from the grip of international development-support, which has brought no useful results for years.
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